Effectiveness trumps efficiency. To borrow the phrase from Peter Drucker, “efficiency is doing things right and effectiveness is doing the right things.” The ideal case is when you’re doing the right things right, but if you have to make a compromise, always do the right things, no matter how inefficient you might be at doing them.
The right things in your business are your High Value Activities (HVAs). Your HVAs are the activities that either generate revenue directly or indirectly enable you to generate revenue. For instance, if you’re a web designer, designing and coding websites is an HVA that generates revenue directly and showcasing your designs in a portfolio is an HVA that indirectly enables you to generate revenue because it’s a marketing activity.
The more of your HVAs you do, the more effective you are, and the more effective you are at delivering to your clients and bringing them in, the more money you make.
Unfortunately, many of the activities we do during our workdays aren’t HVAs. As contrarian as this may sound, spending a lot of time on social media isn’t an HVA unless you’re a social media expert. Checking email to correspond with clients could be, but doing it to the exclusion to the work that you’re being paid to deliver isn’t.
One of the best things you can do for your business is to replace the activities that aren’t high-yield with HVAs. Think about your activities as you would an investment: your TEA (Time, Energy, and Attention) is what you pay, and the return is what the activity does for your business. The more of your TEA you invest in HVAs, the more return you get for your investment.
Action Steps:
- Do an audit of your business activities to determine what your High Value Activities are. If you’re not sure, ask yourself how the activity relates to cashflow, opportunity, or visibility.
- Plan on doing at least one HVA per day.
- Business development activities are HVAs that generally have a very high yield. Try to do something every week that expands your capability to deliver solutions.
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Charlie, I think you’re right on here. I also want to offer my perspective on the difference between efficiency and effectiveness.
Efficiency usually describes how well or how quickly a specific task is being done. There’s an unquestioned assumption that the task is of value. So of course, more efficient must be better.
To me, effectiveness almost always is in relationship to an external higher level objective than simply completing the task. What does completing this task help us to do better? And how much better?
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One of the hardest task a freelancer/entrepreneur can engage in is actually prioritizing his own tasks and focusing on those that really are worth your time, while delegating the rest if possible, keeping on track and never losing the end goal.
It’s definitely easier said than done, but once you got it right, all the rest follows natural.
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Charlie,
Thanks for this timely post.
Successful and wealthy people know that “detail complexity” is a prison from which one should escape.
In the early stages, these head honchos or top-notch professionals try to do everything on their own.
Sure, the “devil lies in the details,” but those details need to be tackled by people you have hired.
When you delegate the details to others, you have more time to focus like a lazer-beam on high-priority tasks which add value.
For example, one of the major tasks of a CEO is networking. A CEO has to play the role of a boundary spanner. This is necessary for the growth of the business.
Thus, traveling to Paris and attending parties are not frills and fancy things, but necessary to build and maintain contacts. By contrast, the details can be handled by other people in the home office.
The insight here is to know the difference between what you have to do yourself and what you can afford to delegate to others. You just can’t handle everything by yourself. Otherwise, you are setting yourself up for failure.
I technically dun own my own business, but as a 1-man internet marketer, and an employee, but high value activities are doing SEO for my websites, and brushing up my technical skills so I can be a more marketable employee
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HVAs sound like a more intuitive version of the Pareto Principle. I try to increase my productivity by being more mindful of myself throughout the day, and occasionally stepping back and asking, “Is this getting me to where I want to go?” It’s a small but simple way to re-evaluate your HVAs.
Thanks Charlie!
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Charlie,
I love this concept! For a long time I’ve been completing tasks that aren’t necessarily crucial to my online career.
Categorizing each task is a good way to better manage my workload. I also love your suggestion to do at least 1 HVA per day.
Definitely something to think about.
Christina
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